How immigrants can revitalise depressed communities

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By Jack Graham

The backlash against immigration is often strongest in economically depressed areas. Yet they have plenty to gain from welcoming immigrants, as Dayton, Ohio shows

Post-industrial areas like America’s Rust Belt have, for many, become a powerful symbol of those who have lost out from globalisation. The decline of old industries, long-term unemployment and economic stagnation have generated an extreme political backlash.

The number one target: immigration.

But what if immigrants could actually help revitalise depressed communities?

With the Brexit vote, President Trump’s surprise victory in 2016 and the far-right Alternative for Germany (AfD) polling 13% in last year’s German federal elections, openness to people is under attack in many countries – often due to a perceived threat to traditional workers. Populist politicians blame society’s ills on an “out-of-touch, liberal metropolitan elite” with no understanding of the lives of these “real people” who are losing out.

The tragic irony, though, is that such communities are often the places that need migration most. With shrinking working-age populations as older generations retire, and demographic decline as families move in search of employment, the fuel to drive an economic resurgence is running low.

Fortunately, some cities such as Dayton, Ohio are bucking the trend and actively courting immigrants. Formerly an industrial heartland, Dayton suffered economic collapse when manufacturing declined. Jobs and working-age people left. From 1980 to 2016, the city’s population fell from over 200,000 people to only 140,000.

But now, through the ‘Welcome Dayton: Immigrant-Friendly City’ scheme, which brings together public and private actors from around the city, Dayton has introduced a number of initiatives to make it a good place to settle for new immigrants. They have training programmes for immigrant entrepreneurs. They provide information about local services and housing rights. They build relationships between immigrant communities and the police. And much more.

And it’s working. From 2009 to 2014 the foreign-born population of the shrinking city jumped by 62%. Meanwhile, Dayton is showing strong signs of economic recovery, including attracting almost $1 billion in capital investment last year.

In the UK, small northern cities that were formerly industrial powerhouses have also suffered a drain of talent and jobs. Along with big cities such as Liverpool and Glasgow, many smaller towns including Oldham and Burnley shrank in the final decades of the 20th century. Thanks in part to the increase in immigration this century, they are no longer shrinking. That said, they are still lagging behind southern England and dynamic local youngsters often migrate to places like London. They too could benefit from emulating the Dayton model.

The problem is particularly severe in eastern Germany, which has experienced a population exodus since German reunification. Opposition to refugees has often been strongest in many of these areas but, in reality, refugees may represent the best chance for these places to turn around their economic fortunes. Chancellor Angela Merkel’s refugee policy was not just introduced out of compassion, but in the national interest: Germany faces a demographic crisis that could eventually bring the economy to its knees.

Importantly, migrants don’t just make up the numbers – they are hugely entrepreneurial. According to the Kauffman annual Index of Startup Activity in the US, immigrants, who are around 13% of the population, represent 27.5% of the country’s entrepreneurs.

In Michigan, for example, where only 6% of the population are foreign-born, a third of high-tech firms created there from 1990 to 2005 had at least one immigrant founder. In a state which lost 800,000 jobs between 2000 and 2010 leading to mass emigration, entrepreneurial migrants are exactly the people it needs.

Similarly, research in the UK in 2015 showed that immigrants were three times as likely to have launched companies as British-born people. Far from taking jobs, immigrants create them. Yet politicians continue to perpetuate the myth that migrants take jobs from native workers.

Of course, in order to unlock migrants’ potential, the right policies need to be in place. In some parts of continental Europe, for example, sclerotic labour markets have been closed to outsiders, leading to high unemployment rates amongst migrants.

Promisingly, the German city of Nuremberg has bundled all of its integration services into a single contact point to help migrants get the help they need far more easily. Among other things, they connect migrants directly with language course providers and the federal employment office, to make the transition as seamless as possible. There are many other effective interventions elsewhere too, as OPEN’s Step Up report with the Tent Foundation highlighted last year.

Meanwhile, governments also need to be much more vigorous in addressing problems such as struggling public services, housing shortages, stagnant wages and areas of high unemployment that are – hugely unfairly – blamed on migrants.

Isolationism might win some votes, but in the long term it’s the people in struggling areas who will continue to lose out. Immigration has the potential to reboot our economies where it’s most needed, and we can’t afford to shut the door.

Jack Graham is a fellow at OPEN.